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RALEIGH, N.C. — North Carolina regulators said yesterday that they asked a judge to withdraw a
proposed settlement that would have allowed Duke Energy to resolve environmental violations by
paying a $99,000 fine with no requirement that the $50 billion company clean up its pollution.

The consent order that the state Department of Environment and Natural Resources scuttled was
meant to settle violations for groundwater contamination leeching from coal-ash dumps near
Charlotte and Asheville. The order had been reached before a Feb. 2 spill from a coal-ash dump in
Eden coated 70 miles of the Dan River in toxic sludge and brought to light a history of Duke being
cited for its leaky, unlined coal-ash dumps that were polluting the groundwater.

Officials said they now will partner with the U.S. Environmental Protection Agency to pursue
joint enforcement against Duke for Clean Water Act violations related to the Dan River dump and
amid new concerns about the illegal releases at another of the company’s sites.

Duke has coal-ash dumps at 14 power plants in North Carolina, all of which were cited last year
for polluting groundwater. After the Dan River spill, the company has been cited for eight more
violations.

The latest came on Thursday, after activists with the Waterkeeper Alliance photographed Duke
employees pumping what the state estimates was 61 million gallons of contaminated water from two
coal-ash dumps into a canal leading to the Cape Fear River.

The state is testing samples from the river for signs of hazardous chemicals. Coal ash contains
arsenic, lead, mercury and other heavy metals highly toxic to humans and wildlife. Several sizable
cities and towns are downstream of the latest spill, but none has reported any problems with
treated drinking water from the river.

Yesterday, the state approved Duke’s plan to repair a crack that has opened in an earthen dam
that holds back millions of tons of coal ash.